Explaining Survivorship Bias

We have a tendency to gravitate towards success stories. It feels good to see someone win, especially if his or her background is deserving of it. When people see success coming to one person or company, they think that by following the same blazed trail, they too will reach the same end. So they launch a company based on insufficient data and inflated hopes. Then when they come crashing down, they wonder why it never worked out for them. That is where Survivorship Bias comes into play.

To best explain Survivorship Bias, think of how an iceberg is structured. What people usually see is not the entire iceberg, but only the 10% that is visible above water. The remaining 90% remains out of sight, below the dark surface of the open water. In the same way icebergs are seen, most people looking for success don’t see the large number of failures that remain hidden, tucked away in life’s bottom drawer.

What’s worse, decisions and calculations are often made on just that 10%, leaving out the 90% where most of the important data lies. If you were given 10% of a recipe you’ve never made, would you feel 100% confident in the outcome of the recipe? Unfortunately, this occurs more often than it should. This bias not only prevents us from being able to see the big picture, but also from extracting valuable lessons from the overwhelming majority that should be learned.

Survivorship Bias occurs regardless of industry. For every successful company exit, there are hundreds of companies that don’t make it past 6 months of existence. For every Peyton Manning, there are numerous Ryan Leafs. For every Daniel Day-Lewis, there are countless dead-body extras in every crime show ever. Where there’s an Uber, there’s a Pets.com. It goes on and on, leading to the thought that the way most concepts and ideas start out should be heavily reevaluated by keeping this bias at the forefront.

When attempting something, whether it’s learning a skill or starting a company, the norm is to discover how people have done it in the past, mimic it, and check progress against certain benchmarks. This works to an extent, but then a plateau arises and people hit a wall. That’s where 90% of people call it a day.

Instead of asking how something can be achieved, one should try asking how something can NOT be achieved. Working from this angle not only reduces the chances of hitting a plateau, but also provides an advantage by thinking differently. Through a literal process of elimination, mistakes can be minified, leaving only the right way to do something. This process can also be done on an ever-increasing scale, since growing a skill or company over time presents new and fascinating challenges along with new avoidable mistakes that others failed to conquer. If this can be done, it will only be the tip of the iceberg.